RBZ weekly gold backed digital tokens mop up ZW$3,5 billion

By Alois Vinga

THE Reserve Bank of Zimbabwe (RBZ) weekly gold backed digital tokens mopped up ZW$3,5 billion in a move that has significantly mopped up excess liquidity from the market.

The central bank this year introduced digital tokens backed by gold reserves to complement the national currency and also serve as an alternative investment option as opposed to chasing after the US$ on the parallel market.

The instruments  can be transferred between people and businesses as a form of payment and are projected to stabilise the Zimbabwean dollar.

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In an update Friday, the RBZ announced that significant progress in the uptake of the tokens.

“The public is hereby  notified  of the results of the RBZ digital tokens Issue 7/2023 held on Thursday June 22 2023.The Bank received 28 applications valued at ZW$3,5 billion in purchase of gold backed digital tokens,” said the bank.

Since the inception of the tokens , excess ZW$ which have been used to finance parallel market activities and this initiative coupled with other mechanisms implemented earlier are expected to go a long way in stabilising the  exchange rate.

Last week , the bank reported that out of 35 applications received  ZW$3 billion was mopped up  and US$4 199, 98 through the instruments.

“Applications under the eighth issue of the RBZ gold backed digital tokens should be submitted through the banks during the course of the week for settlement and issuance on Thursday 29 2023,” the central bank said.

Following Nigeria’s launch of its e-Naira digital currency in 2021 and Ghana and South Africa began piloting their versions, several other African countries – including Namibia, Zambia, Madagascar, Eswatini, Mauritius, Tanzania, Rwanda, Kenya, and Uganda – are exploring the possibility of rolling out their digital currencies.